ELLICOTT CITY, MD – Following the recent adoption of the State budget, Howard County Executive Ball released the following statement on the forthcoming FY26 Operating Budget for Howard County, including plans for local tax rates:
“This year, we are finalizing our FY26 budget under a haze of unpredictability, prompted by drastic changes at the federal and state levels.
In Washington, the Trump Administration and Elon Musk have taken action to reduce the federal workforce, which has a disproportionate impact on Maryland and Howard County.
Approximately 11% of Howard County’s workforce are direct employees of the federal government, and we estimate that at least the same amount are federal contractors or working for federally funded organizations or programs, indicating that approximately one fourth of our workforce will be affected by federal funding and workforce decisions.
Furthermore, the federal government spent approximately $6.1 billion in federal procurement to Howard County-based firms in 2024, one of the highest amounts in the state. This reflects significant investment in the private sector through federal contracting relationships, which suggests exposure to high risks when the federal government is in process of cutting contracts. For Howard County, this significant federal impact means that our anticipated revenues in FY26 are extremely susceptible to changes at the federal level.
Several local government functions are also in limbo. For example, emergency management roles are subject to reductions since FEMA grants are halted. These federal freezes could require Howard County to pick up these positions. Additionally, approximately $600,000 in workforce development services have already been absorbed by Howard County Government due to the lack of federal funding. These are just a couple examples of the immediate impacts that my team has been addressing around the clock.
At the State level, several actions were taken during the 2025 Session that shifted state government costs onto local jurisdictions. As initially proposed, the budget and corresponding Budget Reconciliation and Financing Act (BRFA) shifted roughly a quarter billion in annual statewide costs directly to local jurisdictions, including Howard County. These cost shifts were proposed as strategies to help the State close its FY26 deficit of more than $3 billion.
For Howard County, these shifted state costs include:
- Pension liabilities for Howard County Public School System (HCPSS) teachers to Howard County, at a cost of $6.7 million. These costs are mandatory, are not folded into the HCPSS required Maintenance of Effort funding and are directly billed to Howard County Government.
- Redirecting 90% of the costs associated with the Maryland State Department of Assessments and Taxation (SDAT) to Howard County, at a cost of approximately $1.1 million.
- Pension costs for community college employees to Howard County, at a cost of $200,000.
In addition to these direct costs passed on by the State budget, the Maryland General Assembly passed several pieces of legislation that will have a fiscal impact on Howard County this year. These include:
- New requirements for courtroom security;
- Removing owner-occupied properties from tax sale for unpaid water and sewer bills; and
- New transparency and streaming requirements for local Board of Elections.
For Howard County, cost shifts and new requirements equate to at least $8 million in unanticipated costs that must now be paid directly by Howard County Government in the upcoming fiscal year.
In addition to these changes, there were a number of adjustments to the state tax code affecting income taxes, capital gains taxes, business-to-business taxes, certain excise taxes, and more. At this stage, it is too early to project the ultimate impact of these major tax changes on county budgets.
We are currently in the midst of developing our proposed FY26 Operating Budget. Our Budget supports a variety of critical functions and government services, including funding for the Howard County Public School System, Howard Community College, our library system, police, fire, and public safety personnel, transit services, health programs, and a variety of other critical efforts.
Since our Spending Affordability Advisory Committee Report was released on February 28, Howard County has received various updates, including additional income tax distribution data from the state. We are now projecting that new General Fund revenue will be approximately $68 million in the FY26 budget. As we are working to develop our FY26 budget, we must recognize these external, extenuating, and unprecedented fiscal circumstances.
The Board of Education adopted an operating budget requesting a 14% increase in funding from Howard County Government, equating to approximately $107 million in new recurring funding from the County. This funding request far exceeds available county revenues projected in FY26 to cover all government functions. While we recognize the tremendous value of public education and our school system, we have been working aggressively to prioritize as much funding for HCPSS as possible in our budget deliberations.
In addition, budget requests from our Departments, the Community College, and the Library System exceed $65 million in new funding for the upcoming year.
These Departments provide critical functions for our community, including:
- Public safety through police and fire;
- Personnel to maintain our public facilities and infrastructure;
- Staff for our accessible parks;
- Programs to support critical healthcare services;
- Early childhood development and youth programs;
- Aging and disability supports;
- Social services such as housing, food, and utility assistance; and much more.
Our local budget is facing many pressures because community needs have increased across sectors. For instance:
- County funding to the Department of Community Resources and Services has grown by approximately 150% since FY10 reflecting an increase in community demand for its services and programs. A major driver are services provided under the Office of Aging and Independence, which is vital due to the 60% growth in Howard County’s 65+ population from 2010 to 2020.
- Since FY10, County funding for our Department of Recreation and Parks has grown by 144%, reflecting the growing acreage of parks and open space managed by our team across Howard County. Since 2018, Recreation & Parks has acquired more than 200 new acres of open space and parkland, bringing the grand total of DRP managed parkland and open space to 10,104 acres.
- Funding for Howard County Police Department has increased by 94% since FY10, growing from $81.4 million in FY10 to $158.2 million in FY25. Since 2019, we have added 24 new patrol positions to HCPD, marking the largest increase in sworn personnel in 15 years. As Howard County continues to be a premiere destination for all, the need to provide public safety and employ first responders has increased to keep our community safe.
In summary - accounting for state cost shifts and requests from all County funded agencies and the Board of Education, we are addressing a gap of more than $100 million in FY26 alone. As a local government, we have a duty, obligation, and requirement to propose a balanced budget.
Behind this budget are the people who have dedicated their lives to public service to build a better Howard County for our neighbors. They are the officers and firefighters who run toward danger when all others run away. They are inspectors and engineers who keep our food safe, our drinking water clean, and our roads and pathways maintained and plowed. They are childcare workers, camp counselors, and mental health providers who care for our future. Every day, they demonstrate their commitment to service, and I want to recognize all our employees who are constantly working behind the scenes to respond to increasingly complex issues.
To address our funding gap, Howard County is deploying a number of cost savings measures and cuts within Howard County Government designed to help close our funding gap in anticipation of our budget release next week.
We must make painful choices and take immediate action to achieve better efficiency in service delivery. While the future is uncertain, we are implementing a first round of county actions.
- First, we are immediately pausing hiring for approximately 40 positions in county government. These are currently unfilled positions in county departments and offices. While these positions are important for delivering services, we are prioritizing public safety and core functions within departments.
- Second, we are aligning with our surrounding counties in Maryland and reducing our employer-employee health contribution ratio. Starting January 2026, the County will pay 85% of the healthcare premium costs for employees, a decrease from the current ratio of 90%. County employees will see an increase in their healthcare contributions. This was a difficult choice, and our entire workforce is sharing this pain.
- Third, we are optimizing and reducing technology, mobile communications, and internal county transportation costs to promote efficiency and realize savings. This will save on technology costs, fuel, vehicle maintenance, and more.
- Fourth, we are reducing travel, printing, and training costs across the County by nearly 10% below the prior year’s budget.
- Fifth, we are implementing Energy Savings Days for non-critical County Government buildings. Targeted on days that are close to county holidays and long weekends, the County will close buildings and reduce energy usage at many of our major buildings, serving to reduce energy costs. Buildings for employees working in essential in-person positions, such as public safety, will not be affected. Employees in buildings impacted will be subject to our telework policy. As part of these efficiency efforts, we will reduce water, paper consumption, and energy usage, while ensuring that our buildings remain secure. Additionally, this will limit public-facing services offered in those buildings on those days.
- And finally, we are making overall cuts to County budget requests for FY26 and minimizing new initiatives in our Departments and Offices.
These painful strategies reflect our first round of cuts designed to help close our funding gap. We also know that many employees and families are hurt, especially those families who are impacted by the federal reduction in force. We are working hard to preserve positions for County employees who work tirelessly to serve our community. We are working to ensure that no one loses their job.
Through these county government actions, we are also working with intention to avoid employee furloughs at this time. I want to emphasize that our revenues and our budget remain very susceptible to changes at the federal level, and we will need to continuously evaluate the evolving fiscal situation throughout the upcoming fiscal year. Federal uncertainty continues to loom, and many future impacts are yet to be felt.
I recognize that the cost of living continues to rise, and many household budgets are shrinking this year. Although there is a great deal of financial pressure, I will not raise property taxes or income taxes in our upcoming FY26 budget.
Looking ahead, we are currently in the final stages of developing our FY26 Operating Budget for Howard County and will spend the next week finalizing our spending plan for the year ahead. I will formally release our proposed FY26 Operating on Monday, April 14, 2025.
I want to thank our Budget team, the dedicated and hardworking employees of Howard County Government, and our community as we move through this difficult budget process. Together, we will weather this storm, and together, we will face our challenges head-on.”